In a release OSFI’s assistant superintendent of regulation Carolyn Rogers says the regulator has observed increased used of the terms but that non-banks, including those offering mortgage services, cannot use them either as a corporate or trade name.
Phrases such as “come do your banking with us” would also breach the rules by suggesting that the non-bank was a bank. Essentially anything that would lead the public to believe it is a bank is prohibited.
The Canadian Credit Union Association says the rules will restrict their business and stop them using the words that consumers use to describe what they do.
“This rule will prevent credit unions from advertising their ‘business banking’ services or even having an ‘on-line banking’ button on a website. Having to create and popularize new words is an unnecessary and expensive undertaking, and will make it difficult for credit unions to compete fairly with banks,” said Martha Durdin, CCUA’s president & CEO.
Ms. Durdin says the ruling is inconsistent with past practices from OSFI and is calling on Ottawa to reverse the decision and “fix this so that Canadians continue to have a real competitive option to the big banks.”
OSFI says non-banks have until the end of the year to remove restricted words from websites with print materials restricted from June 2018 and physical signage a year later.
More market update:
The use of terms such as “bank”, “banker” and “banking” must not be used by non-bank financial institutions, the Office of the Superintendent of Financial Institutions has made clear.